This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Hope is not enough

Mar 01, 2010

Regarding your December 2009 editorial, “Hoping for a better 2010,” I was incensed by some of the comments quoted within, especially those from David Farr, CEO of Emerson Electric Co. To paraphrase an old Scottish saying, he must think we all came up the Hudson on a banana boat. Here is a man taking home $6.85 million a year (roughly 200 times the national average wage) and he attempts to lay the blame for his corporate decisions at the door of the U.S. government? Please!

I have no problem with Farr paying himself a fortune. However, he could at least be honest and admit that the reason he would move jobs from the U.S. to India and China has less to do with those countries' “welcome mats” and much more to do with lower wages, zero benefits for the local workforce, and almost zero corporate regulation. Rather than his comments being a no-confidence vote in our government, I would suggest that his actions are a no-confidence vote in America. Presumably, Farr would be happy to invest in America if salaries and benefits and taxes (and therefore the national standard of living) were reduced to the levels in India and China? If he feels so strongly about outsourcing and the excessive costs of doing business in the U.S., why not outsource himself? You can hire a lot of very clever people in China and India for $6.85 million, which leads me to another comment quoted in the article regarding intellectual property. Let's be clear: Intellectual property is by no means the sole preserve of Americans, and never has been. Anyone who thinks the Chinese and Indian people lack intellect, intelligence, training, and qualifications is sadly misinformed.

Based on comments I hear as I travel throughout the country, I suspect that many Americans totally misunderstand the nature of a global economy. It is not a U.S. global economy, but a global global economy. That means free trade for all, not just for us. To prevail, we must compete head on with the entire world and outwit, outclass, outmaneuver, outperform, and if necessary, outsource. But then let's not blame it on “the government.” This is good old capitalism at work, plain and simple, and it is capitalists like Farr who are the driving force behind outsourcing, and capitalist companies like Wal-Mart who are driving cheap Chinese imports.

Let us not fool ourselves here either. The reason Wal-Mart imports so much from China has nothing to do with their Christian principals or a desire to provide inexpensive wares in hitherto undreamed of abundance. It is just another example of hardcore capitalism at work: Reduce costs, increase market share and, above all, maximize profits. That's how capitalism is supposed to work. So let's be honest about it. It is completely hypocritical to enjoy the fruits of a global economy when it is to our benefit, yet decry the very principles that make those benefits possible, and then complain and blame the government when it doesn't work in our favor. Rule number one: A global economy does not mean a fair economy.

Finally, whereas we all share your hope for a better 2010, hope in itself is not enough to defend America's position at the top of the industrial heap. That will take hard work, savvy, ingenuity, investment, R&D, a commitment to excellence in every sector, and above all (hello, Mr. Farr) a commitment to the U.S., its system, and its people — from the top down.